39 F. 764 -

39 F1d 764

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Case Text

764·

FEDERALB]jJpORTER,

vol. 39.

within the description of "minerals," but are strictly earths or parts earthy materials. The clause invoked seems to me to have been intended to cover ores of various minerals, which may be found profitable to import into this country, and whieh may have been purified of their rocky or earthy su'Jstances in order to save expense in transportation. It is further quite apparent from the proof in this case that, even in the condition imported, the commodity in question is a cement within the meaning of clause 44 of Heyl, which includes, not only Portland and Roman cement, b1.1t all other cements. It is, as the proof sho\'I's, a cement as imported, only requiring to be ground to make it fit for use, but probably is improved and made better by the addition of the carbonate of lime. The provision of the law under which the collector acted, however, does not seem to have reference to any special quality of cement i but all cements are made dutiable at the same rate, whether of the higher order of Portland and Roman cement, or of the more common and cheaper sorts. I am, therefore, of opinion that the collector was justified in the classification and assessment of duty in this case, and that the plaintiffs should not recover.

UNITED STATES V. LEIGH.

(Circuit Court, D. Massachusetts.

September 11, 1889\)

"

CUSTOMS DUTIES-ApPRAISEMENT-RoYAJJTY FEES.

Where machinery subject to letters patent in the United States and Great Britain, has been manufactured and sold to the importer in England, the royalty fees forits use paid by the purchaser in this country, which formed no part of the price in England, are not a part of its dutiable value under section 2906, Rev. St. U. S., which requires the collector to cause the market or wholesale price of the article, in the country from which it is exported, to be appraised for the purpose of assessing the duty.

At Law. Action to recover additional duties on machinery. T. H. Talbot, Asst. U. S. Dist. Atty. J. P. Tucker, for defendant.
COLT, J. This is an action brought by the United States for additional duties upon certain machinery imported into the port of Boston by the defendant. Parts of the machinery, at the time of importation, were the subject of letters patent issued by the governments of Great Britain and the United States, the owners being the same in both countries. The government contends that the royalty fee paid by the purchaser in the United States to the defendant for the right to use the machinery in question is a part of the dutiable value of the machinery. It is admitted that the defendant, at the time of making the contract of sale to his purchaser in this country, agreed to furnish the machines at a round price, which included the royalty fee for the right to use the machinery. The

THE· CARaO EX LADY ESSEX.

765

sole question presented in case is whether such a fee,. under these circumstances, should enter into the dutiable value of the importation. Section 2906 of the Revised Statutes provides that, when an ad 'Valorem duty is imposed on any imported merchandise, the collector shall cause the actual market value or wholesale price thereof at the period of the exportation to the United States in the principal markets of the country from which the sa.me has been imported to be appraised, and such appraised \'alue shall be considered the value upon which the duty shall be assessed. The machinery in question was subject to a duty ad valorem, and, if the collector is right, his justification must be found under this provision of the law. The question, therefore, which arises is whether, under this statute, the wholesale price or market value of a machine in England includes a fee paid by a purchaser from the importer in this country to the owners of patents applicable to parts of the machine for the right to use the machine in the United States. It is agreed that in the purchase by the defendant in England of the machine the royalty fee formed no part of the purchase price paid by him. It is difficult, therefore, to see how it can be held to be a part of the market value or wholesale price there, simply because the purchaser from the defendant was to pay a royalty fee for its nse in this country. Suppose a machine had been purchased in England for use in some country where there was no patent upon it, could it be held that the royahy fee exacted for its use in the conntry where it was patented should be added in estimating the market price? A royalty fee paid for the right to make and the right to sell might be considered as a part of the market value for the reason that it is a part of the cost to the maker or vendor, and therefore becomes a factor in the selling price of the article; but a fee paid for use, which in this case it is agreed did not form any part of the price paid by the defendant, cannot, it seems to me, be any part of the wholesale price or market value of' the import in the country from which it was imported, because it is a fee accruing only after manufacture and sale in thatcountry, and payable after importation into the United States. Judgment for defendant.

THE CARGO EX LADY ESSEX.

(District Court, E. D. Michigan.

July 15, 1889.)

VESSEL

1.

OUSTOMS DU'rIES- UNLOADING ASHORE.

OARGO WITHOUT PERMIT -

A vessel which has been driven ashore bv stress of weather has not" arrived" within the limits of the collection district, within the meaning of Rev. St. U. S. Ii 2867, and the unlading of her cargo without authority of the customs officer does not subject it to forfeiture.

2.

SAME-FAII,URE TO GIVE NOTICE.

necessary does not authorize a forfeiture of the cargo.

The failure to give notice of the contingency which makes such unlading